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After contracting the previous year, the construction sector is looking to grow again in 2017. Still feeling the impact of the recent downturn, the sector is only expected to register growth in the fourth quarter, following the negative effects of the coastal El Niño floods in early 2017. While causing significant damage, the floods made it necessary for the newly elected government of President Pedro Pablo Kuczynski to draft an ambitious $3bn reconstruction plan from which the construction sector will benefit in the medium to long term. The government foresees over $9bn worth of investments in the sector in the coming five years. Moreover, real estate investments remained quiet during 2016. While some dynamism was shown in the industrial and retail segments, housing and office did not show the signs of recovery that were expected. Many predict a pickup to occur by the end of 2017 and throughout 2018, as the housing and office segments are closing a cycle where vacancy increased steadily. This chapter features an interview with Fernando Castillo, General Manager, ICCGSA.

The advent of plentiful natural gas has led to an evolution of the energy sector. Among President Pedro Pablo Kuczynski’s key pledges in the 2016 election campaign was the “massification of natural gas” to serve residents and industrial users across southern Peru. Another feature of Peru’s policy focus is to diversify gas exports, including the potential renegotiation of the country’s liquefied natural gas contract with Mexico. The government’s plan to use the country’s reserves to provide cheap fuel to both underserved citizens and industrial concerns should serve the economy well. Further infrastructure investment, to the tune of some $30bn, will be needed if the country is to reach its ambitious goals going forward, however, these plans are viable. This chapter contains interviews with Gonzalo Tamayo, Minister of Energy and Mines, and Carlos Temboury, Director and Chairman, Enel Generación.

The mining sector can be described as one of the main engines of the Peruvian economy as it accounts for 12% of total GDP. It creates direct employment for 174,000 workers and indirectly accounts for another 1.5m jobs. In 2016 mining exports totalled $23.8bn – consisting of 65% of the country’s total merchandise exports. The medium-term outlook is certainly positive, with a range of new mines set to be developed, including Quellaveco in the Moquegua region, where work could start late in 2017. Projects that could come to fruition in 2018 include the Mina Justa and Marcona mines in Ica, the Ollachea gold mine in Puno and expansion works for the Toromocho project in Junín. Work on the Pampa de Pongo iron reserve in Arequipa is expected to start in 2020, and at the Laguna Norte gold mine in La Libertad in 2021. This chapter contains interviews with Carlos Gálvez Pinillos, Vice-President and CFO, Minas Buenaventura, and Luis Rivera, Vice-President, Gold Fields Las Americas.

Though recent highs in premium income have made Peru’s insurance market one of the fastest-growing in Latin America, the country remains comparatively underinsured. Taking these two factors into consideration, the sector has been showing strong growth but from a relatively low base, and that awareness of insurance as a way of managing public and private risks is very low. These low levels of insurance penetration are influenced by Peru’s labour market informality rate of 72%, which is significantly higher than in other countries in the region. This chapter features interviews with Socorro Heysen, Former Superintendent, Superintendency of Banks, Insurance and Pension Funds Administrators of Peru, and Eduardo Morón, President, the Peruvian Association of Insurance Companies.

The Peruvian stock exchange, the Lima Stock Exchange (Bolsa de Valores de Lima, BVL), had a boom year in 2016, achieving one of the highest rates of return in the world. The main index, the Standard & Poor’s (S&P)/BVL Perú General, ended the year at 15,567 points, a gain of 58.1% on the previous year, according to the World Federation of Exchanges. This made it the second-best-performing bourse in the world in 2016, after Egypt. BVL share prices are widely expected to see solid growth in 2017, albeit at a somewhat slower pace than in 2016, as a result of less vigorous performance by mining stocks, as well as some doubts over the underlying strength of the economy as it rebalances towards non-primary sector-led growth. This chapter features an interview with Marco Antonio Zaldívar, President, Bolsa de Valores de Lima.

Peru’s banking system is widely seen as one of the most stable and well regulated in Latin America. One of main the banking sector stories in 2017 is how this solid services industry will adapt to Peru’s gradual transition from average annual growth rates of 7-8% during the commodity boom to a more moderate medium-term average growth rate, with the economy expected to stabilise at around 4-5%. Successive governments have sought to deepen the country’s financial markets, increase the proportion of the population that has access to banking services, and address the wider issue of financial inclusion and poverty reduction. This chapter contains interviews with Julio Velarde, Governor, Central Reserve Bank of Peru, and Miguel Uccelli, CEO and Country Head, Scotiabank Peru.